The (Sports Marketing) World Is Flat – Bernie Ecclestone & F1

Controversial? Check. Ruthless? When necessary. A visionary maverick who has turned a sport that was once extremely dangerous and European-centric into a global force that rivals the Olympics and FIFA World Cup? Undeniably. Love him or hate him, Bernie Ecclestone has made Formula One one of the elite global sports properties. His business acumen and ability to identify new markets has led to a diversified race calendar that features Grands Prix in Malaysia, Bahrain, Turkey, Brazil, Monaco and Singapore to name just a few. Other markets are eager to pay for the privilege of hosting a race and a sport that featured 16 races as recently as 2003 will soon move to a 20-race calendar.

Traditionally, marketing support for Formula One was dominated by tobacco companies such as Marlboro, Lucky Strike and Benson & Hedges, and when the sport cut ties with the industry in 2005 to fall in line with societal trends and government legislation many predicted a dire future for the sport. In reality the departure of tobacco has brought new sponsors such as Johnnie Walker into the fold and other industries with a global footprint – telecommunications, technology, finance – have made major investments.

F1 is an incredibly expensive sport and faces many challenges but smart marketers can find a gold mine of opportunity. Ecclestone has deftly controlled the sport by using that most basic of economic principals: supply and demand. With a limited number of races and team entries (there are currently just 22 cars in an F1 race, compared to close to 40+ at the average NASCAR event), the insatiable global media is forced to over-cover all aspects of the sport. With just a dozen teams and two drivers per team, every sponsor has a chance at the spotlight, whether you are a title sponsor like ING, or a relatively smaller player like Honda F1 partner Oliver Sweeney.

Ecclestone has created a situation where countries like Bahrain can compete with Germany and Japan for sports marketing exposure and for sponsors, where brands like Cadence and Speakerbus can cozy up to giants like Vodafone and RBS; and, where racing fans from Finland can become loyal to Steinmetz, a Swiss diamond company that sponsors Mercedes McLarena, British-German racing team that employs their hometown hero, Heikki Kovaleinen.

While only 32 teams particpate in the FIFA World Cup, circuits, drivers, brands, teams, and most importantly consumers, from virtually anywhere can join the F1 circus which runs eight months a year, every year.

Interesting piece. Of course, with bucketfulls of money comes a lot of other things too…arrogance is the one that springs to mind as regards F1.
The F1 circus has got very dangerously close to disappearing up its own exhaust pipes in recent years and started alienating fans – never a good idea for any business, particularly sports, to annoy the paying customers.
The hedonistic off-season lifestyle of drivers and the numerous hangers-on was beginning to grate, the billions of pounds (dollars) at stake was leading to murky allegations of industrial espionage and more recently Mr Moseley’s difficulties have not helped the image of an elitist sport locked in a rich little word of its own making.
But several things have happened – certainly here in the UK – that are starting to help. The emergence of a new young hero with an edge (Lewis Hamilton) and the decision to switch broadcasters in the UK (back to the BBC) has helped to placate the grass roots somewhat.
Attracting major corporate sponsors is so important, but so is keeping your wider audience.